How & where to spend crypto

What you’ll learn

• How different cryptocurrencies are created for specific purposes
• Why retailers & services might choose to offer cryptocurrency
• The most common things you currently spend cryptocurrency on
• A list of the most popular websites & services accepting cryptocurrency right now

Cryptocurrency is a new form of internet money with properties that suggest it can replace the traditional money we are currently used to. But for money to be useful, you need to be able to buy things with it, so what can you actually spend cryptocurrency on right now?

The difference between Coins & Tokens

To understand what things you can spend cryptocurrency on, you need to understand that there are different categories of cryptocurrency with different intended use cases.

All cryptocurrency can be treated like an investment, similar to a tradeable share in a company on the Dow Jones of FTSE. It can be bought and sold with the intention of making a profit. We have a whole section on how to trade cryptocurrency.

But as constantly repeated, cryptocurrency functions as a form of digital money as well as an investment, but that is a very high level definition, within which there is more detail. 

The two most significant cryptocurrencies are Bitcoin and Ethereum, both fulfilling the two functions – investable and spendable. However, Ethereum also functions as a platform on which you can build other projects, which themselves feature cryptocurrencies and their use cases are often very specific.

This is where the distinction between a coin and token lies. Coins essentially are intended for use as a form of money, and have their own blockchain.

Tokens are created for use as payment within a specific blockchain system.

A good way to understand tokens is to think of going to a Theme Park where you have to purchase special tokens to go on the rides, and the tokens don’t work anywhere else. 

There is a little more complexity, in that cryptocurrency tokens also give the holder the right to vote on  changes to the way the blockchain works. 

Imagine playing an online game, where you collect tokens which can be used within the game itself to purchase things, but also as a way to participate in the game’s evolution.

So what this means is that you shouldn’t expect to be able to spend all cryptocurrencies as money; those that are classified as tokens are really designed for a narrow use-case rather than broad use as money.

Here are some examples:

1. MANA – A token created on the Ethereum blockchain used within Decentraland, a virtual world where users can buy, develop, and sell land.
2. NRM – A token staked on Numerai, a system for crowdsourcing the best models to predict share price movement.
3. FIL – A token used on Filecoin, an open source system where to pay for unused data storage or monetise your own unused storage.